Connect with us
Advertisement

NDB money wars exposed

NDB CHIEF EXECUTIVE OFFICERS: Lorato Morapedi

The National Development Bank (NDB) is trading on thin ice as profits are on a downward spiral and recent indications suggest that they will register a loss for the first time. The Development Bank stands at P320 million in arrears, the main factor that has pit management against staff.


WeekendPost is in possession of documents that illustrate disagreements between management and staff concerning the financial standing and future of the bank. Whistle blowers at the bank have revealed that the 2014/15 financial report which is expected to register a loss of the bank for the first time is still kept under the carpet.


“The Bank is anticipating an operational loss due to high impairments and provision thereof, an interest rate constrained environment, leading to reduced liquidity and this scenario is not only peculiar to NDB,” NDB Head of Branding, Marketing and Communications Harry Marks said.


It is understood that while the financials for 2014 are yet to be approved – the bank is anticipating an operational loss.


Documents passed to this publication, confirm the anticipated loss – the financial position of the bank is in a disturbing state and this is exacerbated by the high level of non-performing accounts.


The bank has an unprecedented number of non-performing accounts.  The total NDB portfolio is P1, 769, 398, 215.00 with total arrears at P319, 035 431.00,” states a letter sent to Minister of Finance and Development Planning Kenneth Matambo dated 16 February 2015 which has been passed to this publication.


“The Bank is constantly borrowing from other commercial Banks which it competes with to lend to the general public. These commercial banks lend NDB funds at unfavourable rates and very onerous conditions as they have taken the view that NDB is a high credit risk – especially because of its management inability to curb the bad debt situation that is spiraling out of control,” the letter reads.


It is understood that the commercial banks often require additional surety or guarantee from government because of the shaky ground on which the bank finances are standing. In another letter dated 12 December 2014 from the National Development bank Employees Union (NDBEU) to the board chairperson, the bank employees are concerned about the bank’s debt.


“To date, and as is the case every year, management is struggling to persuade the external auditors to endorse the annual accounts. As usual, management and staff are called upon to cook up some gymnastic explanation with regard to its bad debt provisioning methodology, and generally account for how it has factored the impact of its substantial uncollectable debt. Such a situation cannot be allowed to persist as an annual ritual, year in and year out.”


According to the information, the bank’s financial position has also been negatively impacted by the decision on implementation of several projects (refurbishment, rebranding etc), all done within a relative short time.

The Some employees state that prioritization on project implementation, employees’ state, was not at all well carried out despite very restrained resources. Refurbishments, sources say were done at the tune of 85 million of which P6.5 million was splashed at the rented Palapye branch.


“Naturally therefore certain projects have now been stopped midway. The office refurbishment and rebranding project has been stalled for example, which presents a very embarrassing scenario given that management has been advertising extensively to the general public that they will now be seeing a brand new bank,” NDBEU said through their letter to bank board Chairperson Mr. L. Seitei who has served for more than 10 years in the position.


This publication is informed that the bank is currently faced with challenges in making disbursements at adequate levels because there are insufficient funds for loan disbursements. This, it is believed, has resulted in delayed service delivery and is affecting the credibility of the bank. “Yet there is no formal or open communication to staff with regard to details of the liquidity situation and what they should expect, or what is expected of them.”
 
According to Marks, overall the banking sector has been experiencing a decline in profitability due to the aftershocks of the 2008 world economic meltdown and partly due to a combination of the factors stated. In addition NDB’s development mandate focuses on start-ups and sectors that are susceptible to diseases and drought such as agriculture, he added. NDB’s primary role is to provide Agricultural loans to farmers and/or potential farmers.


Although the bank said to be in financial trouble, the NDB spokesperson explained that the bank has been performing well since 2010; with total assets increasing by 60% from P1 billion to P1.6 billion in 2014 as a result of an increase in net loans and advances.


However he conceded that the bank’s financial performance has been declining: “the bank has also been profitable during this period (since 2010) with profit declining yearly at P57.8million, P48.6million, P40.5 million, and P45.8million in 2010, 2011, 2012 and 2013 respectively.


NDB employees have previously warned the bank management that a downward spiral in performance would ultimately lead the bank to a position that is not favourable for stakeholders. Some stakeholders are already aware that the bank is facing very serious liquidity problems and is currently unable to pay out loan funds – which is the core mandate – even to applicants whose loans have been approved.


“Loan files that are awaiting disbursement of funds are said to have been stacked up and deliberately delayed as an unofficial internal policy so as to manage the financial crisis. Seasonal agricultural loans, especially those of significant amounts, which should have long been disbursed to farmers for the current rain season, are still pending disbursement. All the while customers have been kept in the dark with regard to what is happening with the processing of their loans,” one of the stakeholders said.


The bank is predicting a loss of an estimated P87 million – which is attributed to lack of financial management. The bank is said to be not performing to its optimum best – in the past five years it was making profits of around P48 million.


When contacted for comment NDBEU President, Gilbert Watshipi was reluctant to share information on the alleged financial crises at the bank. He refused to shed light on any information saying it is internal and insisted that bank management and Finance minister Matambo are in talks with staff to address the challenges faced by the bank. “That issue is internal – and besides we are not allowed to speak to the media,” Watshipi pointed out.


Meanwhile Member of Parliament for Mabule/Goodhope, James Mathokgwane is expected to rally parliament to move a motion calling for a commission of inquiry on alleged maladministration, financial mismanagement, corruption and nepotism at NDB in July sitting.

Continue Reading

News

Civil Service volatility: Democracy vs Bureaucracy

19th April 2021
President Masisi

Here is how one Permanent Secretary encapsulates the clear tension between democracy and bureaucracy in Botswana: “President Mokgweetsi Masisi’s Government is behaving like a state surrounded with armed forces in order to capture it or force its surrender. The situation has turned so volatile, for tomorrow is not guaranteed for us top civil servants.

These are the painful results of a personalized civil service in our view as permanent secretaries”. Although his deduction of the situation may be summed as sour grapes because he is one of the ‘victims’ of the reshuffle, he is convinced this is a perfect description of the rationale behind frequent changes and transfers characterising the current civil service.

The result of it all, he said, is that “there is too much instability at managerial and strategic levels of the civil service leading to a noticeable directionless civil service.” He continued: “Changes and transfers are inevitable in the civil service, but to a permissible scale and frequency. Think of soccer team coach who changes and transfers his entire squad every month; you know the consequences?”

The Tsunami has hit hard at critical departments and Ministries leaving a strong wave of uncertainty, many demoralised and some jobless. In traditional approaches to public administration, democracy gives the goals; and bureaucracy delivers the technical efficiency required for implementation. But the recent moves in the civil service are indicative of conflicting imperatives – the notion of separation between politicians and administrators is becoming blurred by the day.

“Look at what happened to Prisons and BDF where second in command were overlooked for outsiders, and these are the people who had sacrificially served for donkey’s years hoping for a seat at the ladder’s end. The frequency of the changes, at times affecting the same Ministry or individual also demonstrates some level of ineptitude, clumsiness and lack of foresight from those in charge,” remarked the PS who added that their view is that the transfers are not related to anything but “settling scores, creating corruption opportunities and pushing out perceived dissident and former president, Ian Khama’s alleged loyalists and most of these transfers are said to be products of intelligence detection.”

Partly blaming Khama for the mess and his unwillingness to let go, the PS dismissed Masisi for falling to the trap and failing to outgrow the destructive tiff. “Khama is here to stay and the sooner Masisi comes to terms with the fact that he (Masisi) is the state President, the better. For a President to still be making these changes and transfers signals signs of a confused man who has not yet started rolling his roadmap, if at all it was ever there. I am saying this because any roadmap comes with key players and policies,” he concluded.

The Ministry of Health and Wellness seems to be the most hard-hit by the transfers, having experienced three Permanent Secretaries changes within a year and a half. Insiders say the changes have everything to do with the Ministry being the centre of COVID-19 tenders and economic opportunities. “The buck stops with the PS and no right-thinking PS can just allow glaring corruption under his watch as an accounting officer. Technocrats are generally law abiding, the pressure comes with politically appointed leaders racing against political terms to loot,” revealed a director in the Ministry preferring anonymity.

The latest transfer of Kabelo Ebineng she says was also motivated by his firm attitude against the President’s blue-eyed Task Team boys. “The Task Team wants to own the COVID-19 pandemic and government interventions and always cry foul when the Ministry reasserts itself as mandated by law,” said the director who added that Masisi who was always caught between the crossfire decided on sacrificing Ebineng to the joy of his team as they (Task Team) were in the habit of threatening to resign citing Ebineng as the problem.

Ebineng joins the Office of the President as a deputy Coordinator (government implementation and coordination office).The incoming PS is the soft-spoken Grace Muzila, known and described by her close associates as a conformist albeit knowledgeable.

One of the losers in the grand scheme is Thato Raphaka who many had seen as the next PSP because of his experience and calm demeanour following a declaration of interest in the Southern African Development Community (SADC) Secretary post by the current PSP, Elias Magosi.

But hardly ten months into his post, Raphaka has been transferred out to the National Strategy Office in what many see as a demotion of some sort. Other notable changes coming into OP are Pearl Ramokoka formerly with the Employment, Labour and Productivity Ministry coming in as a Permanent Secretary and Kgomotso Abi as director of Public Service Reforms.

One of the ousted senior officers in the Office of the President warned that there are no signs that the changes and transfers will stop anytime soon: “If you are observant you would have long noticed that the changes don’t only affect senior officers but government decisions as well. A decision is made today and the government backtracks on it within a week. Not only that, the President says this today, and his deputy denies it the following day in Parliament,” he warned.

Some observers have blamed the turmoil in the civil service partly to lack of accountable presidential advisers or kitchen cabinet properly schooled on matters of statecraft. They point out that politicians or those peripheral to them should refrain from hampering the technical and organizational activities of public managers – or else the party (reshuffling) won’t stop.

In the view expressed by some Permanent Secretaries, Elias Magosi, has not really been himself since joining the civil service; and has cut a picture of indifference in most critical engagements; the most notable been a permanent secretaries platform which he chairs. As things stand there is need to reconcile the imperatives of democracy and democracy in Botswana. Peace will rein only when public value should stand astride the fault that runs between politicians and public managers.

Continue Reading

News

Morupisi fights for freedom in court

19th April 2021
morupisi

Former Permanent Secretary to the President, Carter Morupisi, is fighting for survival in a matter in which the State has charged him and his wife, Pinnie Morupisi, with corruption and money laundering.

Morupisi has joined a list of prominent figures that served in the previous administration and who have been accused of corruption during their tenure in office. While others have been emerging victorious, Morupisi is yet to find that luck. The High Court recently dismissed his no case to answer application.

This content is locked

Login To Unlock The Content!

Continue Reading

News

Pressure mounts on Biden to suspend Covid-19 vaccine patents

19th April 2021
Joe Biden

United States President, Joe Biden, is faced with a decision to make relating to the Covid-19 vaccine intellectual property after 175 former world leaders and Nobel laurates joined the campaign urging the US to take “urgent action” to suspend intellectual property rights for Covid-19 vaccines to help boost global inoculation rates.

According to the world leaders, doing so would allow developing countries to make their own copies of the vaccines that have been developed by pharmaceutical companies without fear of being sued for intellectual property infringements.

“A WTO waiver is a vital and necessary step to bringing an end to this pandemic. It must be combined with ensuring vaccine know-how and technology is shared openly,” the signatories, comprising more than 100 Nobel prize-winners and over 70 former world leaders, wrote in a letter to US President Joe Biden, according to Financial Times.

A measure to allow countries to temporarily override patent rights for Covid related medical products was proposed at the World Trade Organization by India and South Africa in October, and has since been backed by nearly 60 countries.

Former leaders who signed the letter included Gordon Brown, former UK Prime Minister; François Hollande, former French President; Mikhail Gorbachev, former President of the USSR; and Yves Leterme, former Belgian Prime Minister.

In their official communication, South Africa and India said: “As new diagnostics, therapeutics and vaccines for Covid-19 are developed, there are significant concerns [about] how these will be made available promptly, in sufficient quantities and at affordable prices to meet global demand.”

While developed countries have been able to secure enough vaccine to inoculate their citizens, developing countries such as Botswana are struggling to source enough to swiftly vaccine their citizens, something which world leaders believe it would work against global recovery therefore proving counter-productive.

Since the availability of vaccines, Botswana has been able to secure only 60 000 doses of vaccines, 30 000 as donation as from the Indian government, while the other 30 000 was sourced through COVAX facility.  Canada, has pre-ordered vaccines in surplus and it will be able to vaccinate each of its citizens six times over. In the UK and US, it is four vaccines per person; and two each in the EU and Australia.

For vaccines produced in Europe, developing countries are forced to pay double what European countries are paying, making it more expensive for already financially struggling economies.  European countries however justify the price of vaccines and that they deserve to buy them cheap since they contributed in their development.

It is evident that vaccines cannot be made available immediately to all countries worldwide with wealthy economies being the only success story in that regard, something that has been referred to as a “catastrophic moral failure”, head of the World Health Organisation (WHO), Tedros Adhanom Ghebreyesus.

The challenge facing developing countries is not only the price, but also the capacity of vaccine manufactures to be able to do so to meet global demand within a short time. The proposal for a patent waiver by India and South Africa has been rejected by developed countries, known for hosting the world leading pharmaceutical companies such US, European Union, the United Kingdom, and Switzerland.

According to the Financial Times, US business groups including pharmaceutical industry representatives, have urged Biden to resist supporting a waiver to IP rules at the WTO, arguing that the proposal led by India and South Africa was too “vague” and “broad”.

The individuals who signed the letter, including Nobel laureates in economics as well as from across the arts and sciences, warned that inequitable vaccine access would impact the global economy and prevent it from recovering.

“The world saw unprecedented development of safe and effective vaccines, in major part thanks to US public investment,” the group wrote. “We all welcome that vaccination rollout in the US and many wealthier countries is bringing hope to their citizens.”

“Yet for the majority of the world that same hope is yet to be seen. New waves of suffering are now rising across the globe. Our global economy cannot rebuild if it remains vulnerable to this virus.”
The group warned that fully enforcing IP was “self-defeating for the US” as it hindered global vaccination efforts. “Given artificial global supply shortages, the US economy already risks losing $1.3tn in gross domestic product this year.”

Continue Reading
Do NOT follow this link or you will be banned from the site!